GSMA makes G20 deal


The GSMA has told G20 summit leaders that the global mobile industry will invest $550 billion (£371.35 billion) in network rollouts, in return for reduced regulation.

GSMA representatives presented G20 leaders a letter signed by bosses of 25 top mobile companies, including Nokia, Ericsson, Telefonica, Vodafone, Telecom Italia, Bharti, Deutsche Telekom, MTN and Orascom.

The letter claimed the investment could create 25 million jobs and help pull the world out of recession. But the industry bosses in return have asked governments to commit to “allocate the radio spectrum needed over time to build these new networks, and delivery of a stable, predictable and minimally intrusive regulatory environment”.

Ovum senior analyst Emeka Obiodu said: “The industry has done reasonably well despite the economic challenges.

“The call for more affordable spectrum is inexorably linked with the request for a stable regulatory regime. At a time when the industry is debating how the economic downturn will affect the timescales for the rollout of LTE, the $550 billion investment pledge is commendable.

“The industry was badly hurt by the excesses of the 3G licensing regime and should governments adopt a similar approach it is fair to assume that new network rollouts will not occur on a grand scale. “Similarly, the industry has experienced a wide range of regulatory onslaughts. Whether it is roaming, termination rates or mobile number portability, the industry has always eventually accepted its fate for the ‘greater good of society’. So now is the time for the GSMA to speak up for itself to avert a complete trampling of the industry.”

However Obiodu added that governments may be wary of another industry calling for lighter regulation, in light of the G20 reenforcing greater regulation on the financial sector.

“As such, the mobile industry cannot expect governments (which have come up with their own $1.1 trillion stimulus package) to capitulate to its offer. Several mobile operators have already slashed their capex spending in the face of the recession, impacting new mobile network deployments,” said Obiodu.

“The industry must localise its call. After all, the G20 only represents twenty of the markets in which it operates. Also, for those markets, especially in Europe, where governments have a national broadband agenda, the mobile industry will achieve more by reinforcing its position locally. For the CEOs to achieve their aim, both global and local pressure will be required.”